The Bradford-based group, which offers credit to people on modest incomes or to those who have trouble borrowing from mainstream lenders, said profits rose 12 per cent to £162.1million in 2011 as it benefited from cautious lending and a strong demand for credit cards.

Vanquis Bank, the group's credit card arm which recently started accepting deposits, was the star performer, with profits up by two-thirds to £44.2million.

Vanquis, which typically lends to people who
have been turned down elsewhere, said it received 1.5million
applications for credit cards in the year, which drove a 27 per cent
rise in customer numbers to 691,000.

It also saw delinquency rates falling to an all-time low in the second half of the year.

Provident Financial, which has a
total of some 2.5million customers, said its performance in 2012 has
continued to be strong but it expects the number of people falling
behind with repayments will rise in 2012 as unemployment approaches
three million.

More...

Its consumer credit division, which
typically lends to customers who are paid by the hour, saw customer
numbers fall 1.9 per cent to 1.8million as it tightened its lending
criteria and focused on existing customers with a track record of
keeping up with repayments.

Jump: Provident Financial shares were up 7% today as it posted 12% increase in profits in 2011

Profits for the division were flat at £127.5million as impairment rates fell.

Chief executive Peter Crook said:
‘The close attention to credit quality in both businesses has been the
foundation of the group’s good performance in a year that has seen
pressure on customers’ disposable incomes.

‘Whilst this pressure continues in an employment market that is
displaying some weakness, tight credit standards will remain in place.’